'Dongbang, Global, Sebang, CJ Logistics, KCTC, Korea Express' Collusion in Hyundai Heavy Industries Shipbuilding Parts Bidding... 6.8 Billion KRW Fine
[Sejong=Asia Economy Reporter Joo Sang-don] Six companies, including Dongbang, Global, Sebang, CJ Logistics, KCTC, and Korea Express, were caught colluding in the bidding for heavy cargo transportation services for shipbuilding parts ordered by Hyundai Heavy Industries.
The Fair Trade Commission (FTC) announced on the 7th that it decided to impose corrective orders and a total fine of 6.839 billion KRW on the six businesses that colluded in 34 bids over approximately 14 years from 2005 to 2018.
According to the FTC, as Hyundai Heavy Industries changed its selection method for transportation service providers of shipbuilding parts from negotiated contracts to bidding starting in 2005, the six participating companies found it necessary to prevent transportation unit prices from decreasing due to competition. Accordingly, from 2005 to 2018, the six companies prearranged the allocation of volumes, the expected winning bidders (or preferred negotiators), and bid prices in advance for a total of 34 heavy cargo transportation service bids ordered by Hyundai Heavy Industries.
As a result of this agreement, during the period, the expected winning bidders or preferred negotiators won the bids or signed negotiated contracts in all 34 cases.
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An FTC official stated, "This action is significant in that it uncovered and sanctioned bid-rigging activities where transportation companies in a cooperative relationship maintained collusion over a long period in bids for heavy cargo transportation services ordered by Hyundai Heavy Industries, which was struggling due to the downturn in the shipbuilding industry, thereby raising transportation costs." He added, "Through this, it is expected that the temptation for collusion in similar transportation service bids ordered by shipbuilding businesses will be greatly reduced."
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